The Dumper and Dumper Truck Union Lime Stone (‘OP-1’) is a company engaged
in the business of logistics and transportation of goods across India by road and rail. It is the only union of truckers and transporters in the Sanu Mines area of Jaisalmer, Rajasthan. All Members of Dumper and Dumper Truck Union Lime Stone (‘OP-2’) are collectively members of OP-1. OP-1 and OP-2 are collectively referred to as the (‘OPs’). ^[1]

CJ Darcl Logistics Ltd. (‘Informant’) received a tender from JSW Energy (Barmer) Limited (‘JSW’) to transport limestone. It was alleged that the OPs do not allow any others to ply their vehicles or drivers, make it mandatory to take vehicles along with drivers from OP-1 and its members only, and that too at a higher rate that the contracted rate. The OPs also threatened the Informant with bodily harm to its personnel. As a result of such coercion by OP-1 and the lack of a favourable response from the JSW regarding the frustration of contract, the Informant had to provide transportation services at a rate of 500/MT, rather at a rate of 460/MT which was stipulated in the tender floated by the JSW.

Accordingly, the Informant alleged that the OPs’ conduct violated Section 3(3)(b) read with Section 3(1) of the Act. The Informant also alleged that fixing of arbitrary rates for the transportation of goods by OP-1, and arbitrary condition to only transfer limestone through their own trucks and drivers, was in violation of Section 4(2)(a)(ii) and 4(2)(a)(i) read with Section 4(1) of the Act.

Findings of DG: The DG found that the Informant has been restrained from executing its contract with JSW by OP-1, and that the conduct of the OPs directly or indirectly determined the price for providing services by the Informant and was therefore in violation of Section 3 of the Act.

The DG also found Mr. Kunwar Raj Singh (the then Chairman of OP-1) liable under Section 48 of the Act in perpetuating the anti-competitive conduct on behalf of OP-1 and was at the helm of affairs of OP-1. He was also found to have extended the threat/boycott to the Informant and its employees and involved in the fixing the price of transport per truck, belonging to members of OP-1.

Decision of CCI: The CCI opined that imposition of a higher rate of transportation by OP-1, which led to the Informant losing a contract at a rate of 40/MT, and thereby limiting the provisions of transportation services, by the OPs was in contravention of Sections 3(3)(a) and 3(3)(b) of the Act. As such, the CCI imposed cease and desist orders against OP-1and Mr. Kunwar Raj Singh, who to refrain from anti-competitive practices identified under the order. The CCI also noted that neither OP-1 nor Mr. Kunwar Raj Singh furnished copies of their financial statements/Income Tax Returns, as, despite specific directions and sufficient notice given by the CCI to do so. As the requisite information was not on record, the CCI noted that a separate order regarding the imposition of monetary penalty on OP-1 and Mr. Kunwar Raj Singh may be appropriately considered after receipt of such information.

With respect to allegations under Section 4 of the Act, the CCI noted that the DG did not arrive at any categoric finding as to whether OP-1 was involved in any economic activity by providing its trucks and drivers for transportation of goods and was collecting considerations received for provision of such services. As such, the CCI did not determine the facts and circumstances as to whether OP-1 is an enterprise under provisions of Section 2(h) of the Act. Consequently, no case was made out under provisions of Section 4 of the Act.

[1] Case No. 31 of 2019.